Robot technology may soon be packing, picking and moving goods – and solving a looming labor shortage in the logistics industry.

There’s a new challenge in store for the logistics and supply chain sector: as demand for deliveries rises, the work force in many markets is predicted to shrink and age. The solution? Robots may soon be standard in warehouses around the world.

E-commerce is growing at an extraordinary rate (an estimated 10 percent per year in the U.S., according to Forrester Research). Take the Chinese festival of Singles Day which has become one of the biggest online shopping days in the world. In 2014, sales in Alibaba’s sites Tmall and Taobao reached $9.3billion. In 2015, that figure rocketed to over $14.3billion. No wonder logistics firms are already running short of workers to pick, pack and move shipments.

In the future, the problem is likely to worsen: across the developed world, populations are slated to shrink and go gray, leaving the U.S. and other major economies with labor shortages in the millions of workers.

That’s a problem robots might be able to solve, according to a white paper by DHL. Robots that work with human colleagues could help fill the gap between the required work force and the available labor pool and make logistics jobs physically easier, so employees can work into their 60s and beyond.

FLEXIBLE AND LOW COST

Thus far, the use of robots in the logistics arena has been limited by the complexity of the work, because logistics robots must be able to handle a wide array of different parts in an infinite number of combinations. Robotic technology is beginning to catch up with the demand for machines flexible and low cost enough to work in the logistics and distribution environment. Recent advances are the result of three factors: a flood of government research funding, venture capital and significant investments from tech giants like Amazon and Google.

Robots could pick easy items while humans pick the more complicated products or complete complex tasks.

The attention and investment is toppling a series of key barriers. To be useful in logistics, robots must have “eyes” to see an object, “hands” to pick it up, “feet” so that they can move the object to another place and “brains” that coordinate all of these tasks. Cell phones and video game systems like Microsoft’s Kinect have driven a tremendous drop in the costs of optical, tactile and motion sensors, giving robots “eyes.” To solve the problem of “arms,” several companies are working on robot arms that are less powerful or equipped with sensors to detect nearby humans, making them safer for people to work near or even with.

Technology similar to self-driving cars may soon power robots that can move safely in constantly shifting environments such as shipping warehouses or even perform “last-mile” deliveries straight to homes and offices, giving robots “feet.” And, finally, robot designers are working to harness the computing power of the cloud to move computationally demanding tasks such as image processing off board, reducing the need for robots loaded down with advanced processors.

Another field attracting attention is the possibility of using robotic technology to enhance human performance rather than just supplement it. Exoskeletons – powered suits that give people power, strength and endurance that they would not normally have – could help prevent injuries or make it possible for older workers to perform physically strenuous tasks with less effort.

IMPROVED SERVICE LEVELS

Several companies are working on mobile robots that would cruise warehouses picking items just like a person would. The concept is scalable: if you have a small distribution center you could add robots one at a time as you grow, for example. And by automating smaller warehouses, companies would provide improved service levels by locating distribution centers closer to customers.

A similar phenomenon could change the face of “last-mile” delivery. Not unlike drones, small robots could cruise city streets and sidewalks, bringing packages from warehouses or delivery hubs to customers autonomously.

When it comes to a fully-automated future, logistics professionals have a right to be skeptical. Robots have been hyped for decades, and for most of that time they’ve failed to deliver. But that’s poised to change. As the study’s authors wrote, “our children can’t picture a world without computers and it is likely that their children will feel the same way about robots.” Someday soon, warehouses and supply chains will see machines and humans working side by side to deliver goods faster and more economically.

BENEFITS OF ROBOTICS IN LOGISTICS AND MANUFACTURING

While it does not need to be stated, you must remember that robots are not people. Robots do not have emotions. Robots do need sleep. Although, some may argue robotic programs have life-like responses to our needs.

Robots have the potential to create a limitless workforce that does not have additional expenses on a company. For example, retirement benefits, paid-time-off, overtime pay, adherence to daily work schedules, and other aspects of typical workers is completely eliminated when robotics are employed in supply chain processes.

Robotics also impact the efficiency and analysis of supply chain processes. Robotics can sort through incoming and outgoing packages faster, place them on the appropriate shelves, or shipping containers, and ensure the packages do not have any defects, which would cause unnecessary returns or delays in the order fulfillment process. Robots may also detect issues arising around them. For example, robotics could be used to prevent a truckload of merchandise leaving the warehouse if a wreck has occurred several miles away. Alternatively, robotics could provide the drivers with an alternative route prior to leaving. This may sound nearly identical the use of the IoT in supply chain processes. However, robotics would be comparable to the physical action that takes place following the identification of inefficiency. Therefore, robotics can be applied to the software aspects of supply chain processes, even though human input may still be necessary.

Robots are capable of inhuman feats, such as lifting heavy objects or reaching tiny areas. This impacts how items may be manufactured. For example, humans must create build an item from the inside out, as our tools only allow us to perform certain actions. Alternatively, a robot could use a tool of much larger reach and smaller grasp to enter a tighter space to perform a certain action. This leads to the possibility of locating faster, more efficient ways of building a product. Furthermore, newer robots have more applications as they may be repurposed to meet the needs of the manufacturing and logistics industry. Unlike their predecessors, modern robots are typically lightweight and easier to relocate throughout a manufacturing plant or order fulfillment center. Now, consider what means for the future.

Amazon: The Leader of the Bleeding Edge of Robotics in Logistics Practice

At the ICRA 2015 conference, an international forum for robotics researchers, Amazon hosted the “Amazon Picking Challenge,” where robots from 27 entrants from around the world tried to autonomously grab items from a shelf and place them in a tub. In other words, the robots had to recognize the different shapes, colors, and sizes of the items to be picked on their own. According to an article in Quartz:

Amazon built a shelf and filled it with a range of everyday items it sells—including Oreos, Cheez-Its, spark plugs, dog treats, and of course, a few books—to test out the challengers’ picking potential…Team RBO from the Technical University of Berlin absolutely dominated the competition. Out of 12 objects encountered, RBO’s robot was able to successfully pick ten.

RBO won the competition with 148 points—along with $20,000 in prize money—while its closest competitor, a team from MIT, received 88 points.

The video below shows the RBO robot in action:

However, beyond the bleeding edge, Amazon is truly already practicing the effective use of robotics in logistics with the purchase of Kiva Systems, which was renamed to Amazon Robotics, just lat month. The purchase of Kive Systems, for $775 Million allowed the online retailer to get ready for the rush of the holidays this past year, as stated in the Wall Street Journal:

The Seattle online retailer has outfitted several U.S. warehouses with squat, orange, wheeled robots that move stocked shelves to workers, instead of having employees seek items amid long aisles of merchandise, according to people familiar with the matter.

At a 1.2-million-square-foot warehouse in Tracy, Calif., about 60 miles east of San Francisco, Amazon this summer replaced four floors of fixed shelving with the robots, the people said.

Now, “pickers” at the facility stand in one place and wait for robots to bring four-foot-by-six-foot shelving units to them, sparing them what amounted to as much as 20 miles a day of walking through the warehouse. Employees at some robot-equipped warehouses are expected to pick and scan at least 300 items an hour, compared with 100 under the old system, current and former workers said.

At the heart of the robot rollout is Amazon’s relentless drive to compete with the immediacy of shopping at brick-and-mortar retailers by improving the efficiency of its logistics. If Amazon can shrink the time it takes to sort and pack goods at its roughly 80 U.S. warehouses, it can guarantee same-day or overnight delivery for more products to more customers.

The robots could also help Amazon save $400 million to $900 million a year in so-called fulfillment costs by reducing the number of times a product is “touched,” said Janney Capital Markets analyst Shawn Milne. He estimated the robots maypare 20% to 40% from the average $3.50-to-$3.75 cost of sorting, picking and boxing an order.

Now that is some serious savings, and thus the reason more and more companies will look to implement robotics in logistics: bottom line savings and overall efficiency, which leads to a more competitive and adaptive company.

FUTURE OF ROBOTICS IN LOGISTICS AND MANUFACTURING

The future of robotics contains the same level of certainty as the sun’s rising in the morning. Robots are becoming an integrated portion of the workforce, and they will be there every day thereafter, unless a company ditches robotics altogether. However, this is not likely as each robotic investment is representative of long-term expense reduction, improved efficiency, and an invaluable source of information. The future of robotics will change in the coming years, and more people will face the cycle of entering a higher-level position that robots “cannot possibly hope to take over.”

Meanwhile, companies employing robotics are working to please their customers, and if you consider the typical cost of a Sawyer robot of $25,000, you are looking at the minimum annual salary for a traditional worker. Think about how this single purchase could last for decades to come. Within 40 years, a single Sawyer robot could save a company $1 million. Ignoring robotics in logistics and manufacturing is no longer an option for any entity.